Real-Time Bidding (RTB) Explained: A Complete Guide for Advertisers

Ashwin Krishnakumar
Ashwin Krishnakumar

Chief Technology Officer, Airtory

Published on: 12 Jul 2022

Reading time: 7 minutes

One of the most popular marketing techniques adopted by advertisers all across the world, programmatic advertising refers to a way of purchasing ads through an automated and streamlined process that utilizes relevant technology. The term ‘programmatic’ is often used interchangeably with real-time bidding. While the two concepts are not the same, real-time bidding can be considered a subset of programmatic advertising. Programmatic advertising or media buying can actually be categorized into three types – Private Marketplace Buying, Programmatic Direct, and Real-Time Bidding.

What is Real-Time Bidding?

The scenario where users are shown relevant display ads online based on their browsing history or online footprint can be attributed to real-time bidding. In simple words, real-time bidding or RTB is an auction that takes place in real-time where publisher requests are sent to an open exchange, which facilitates an auction to get bids from buyers. With RTB, publishers can maximize their inventory efficiency and advertisers can ensure high relevancy in their targeting, making it a win-win situation for all.

Understanding the Real-Time Bidding Ecosystem

To understand how the RTB process works, it is first important to understand the entities that are involved in the process. The RTB ecosystem basically consists of: -

  • The Supply Side (Publishers): The publisher is the website or online asset which has ad spaces that it wants to sell, which is also referred to as its ad inventory. Publishers connect to an open exchange through a Supply-Side Platform (SSP).
  • The Demand Side (Advertisers): The demand side consists of advertisers and demand-side platforms. Advertisers use DSPs for targeting and to buy ad impressions that have been made available through open ad exchanges.
  • The Ad Exchange: The ad exchange is the medium that facilitates the transactions between publishers and advertisers in real-time. An ad exchange ensures the auction and transaction are completed within a few milliseconds even before a page can load.

SSPs allow publishers to make their ad inventory available and are responsible for running auctions for ad spaces that are instantly purchased by the highest bidders. On the other hand, DSPs entails the service that allows advertisers to launch their ad campaigns. During this entire process, the transactions are facilitated by the ad exchange.

What Happens Every Time a User Loads a Page?

The RTB marketplace (programmatic) has been organized akin to ad exchanges where ad inventories are traded by publishers and advertisers. Here’s how the process of real-time bidding unfolds every time a user loads a page:

  • When a user visits a page, the browser sends a request to the ad server to load an ad.
  • The publisher’s site generates a request, informing the SSP that an impression is available.
  • The SSP analyses the request as well as the available user information and sends the same to the ad exchange.
  • The ad exchange then connects to the DSPs and relays the user information.
  • The DSPs determine what the impression is worth based on predefined parameters.
  • The ad exchange begins the auction and based on the worth of the impression, DSPs bid on it.
  • The highest bid is the winner and is sent back to the publisher. Thereafter, it is displayed to the user.

Why You Should Consider Real-Time Bidding

Real-time bidding’s automated algorithms allow advertisers to connect to thousands of publishers and vice versa, making the process increasingly cost- and time-efficient.

Benefits for Publishers

Some of the benefits that RTB advertising offers to publishers are as follows: -

  • Accurate Pricing: The entire process is driven by technology, ensuring that precisely the highest bid amount delivers the impression. This allows publishers to receive more value for their inventory with real-time bidding.
  • Increases Value of Remaining Inventory: RTB helps publishers monetize as much of their inventory as possible. Advertisers who bid based on audience data can easily help utilize the ad inventory that may previously have been non-monetized.
  • Added Control: As a publisher needs to work through an SSP to partake in RTB auctions, they have better control over ad inventory as they can set pricing as well as define which advertisers can buy the inventory.
  • Audience Insight: With RTB, it’s easier to determine the audience that advertisers prefer, to fetch better prices, thus allowing them to expand in the more profitable segments.
  • Better Performance in Direct Sales: RTB gives valuable insight to publishers which can be utilized for direct sales of inventory as well. A better understanding of what they are selling, who they are selling to, and the prices that work best for their offerings can help publishers in creating better pricing and direct sales strategies.

Benefits for Advertisers

The best benefits that advertisers get from Real-Time Bidding ads include:

  • Reduce Wasteful Media Buying: RTB allows for impression-based ad inventory buying through numerous variables which makes targeting extremely focused. Advertisers no longer need to partake in bulk media buying, which risks money being wasted on irrelevant audiences. Advanced tools can also help improve campaign efficiency.
  • Better Performance: Campaigns can be viewed and managed in real-time, thereby allowing advertisers to adjust bids and targeting as and when the need arises. This allows them to stay on top of results and get better performance on their campaigns.
  • Valuable Consumer Insight: Running campaigns with RTB allows advertisers to improve their marketing strategies. They also get the opportunity to understand consumers better through impression data gathered.
  • Brand Protection: RTB lets advertisers specify where their products or services are promoted and with ad verification services, they can avoid illicit websites or pages from displaying their ads.

How to Get Started with Real-Time Bidding

From a marketing standpoint, RTB is more of a method or process for purchasing impressions, there is no particular platform for RTB. Advertisers need a demand-side platform while publishers require supply-side platforms to get started with RTB.

For Advertisers

DSPs allow inventory buyers to manage accounts on numerous ad exchanges, allowing them to bid across multiple exchanges. Here are the main factors that advertisers should consider when choosing a DSP: -

  • Reach: The ‘biggest and best reach’ is not the only thing to look for. While access to global traffic is important, inventory quality is just as important. Look at the traffic sources before making the decision.
  • Efficiency and Flexibility: Efficiency is key so look for the ease of using the platform, real-time reporting, campaign planning tools, variety in targeting options, etc.
  • Support: Whether it is support for setting up campaigns or technical assistance, ensure the platform offers robust customer support.
  • Costs: The costs charged by a DSP for its services vary significantly. It may be a percentage of the advertiser’s bid, it may be based on the amount of money the advertiser commits to spending - it may require a minimum monthly or annual spend, etc. Advertisers need to ensure the costs are fair and transparent.
  • Data: Advertisers need to check the number of audience segments available for targeting and how wide the platform’s reach is in audiences that are relevant to them.

If advertisers are working with a Creative Management Platform, it is important to ensure that the platform provides easy, simple-to-use Tags that can be executed on any DSP they choose.

For Publishers

Publishers should look for SSPs that provide proper support and services as well as a proper dashboard with analytics to track and control their ad inventories. However, publishers must meet some basic requirements if they wish to make their ad spaces available for RTB. This helps ensure advertisers have quality publishing sites to choose from. The requirements a publisher must meet for advertising and marketing vide RTB include: -

  • Page Views: The requirement may vary with different SSPs, but it is crucial for publishers to have a minimum number of page views to be listed.
  • Target Audience: Not a hard and fast requirement but publishers with specific audience bases are preferred. Having a chunk of certain segments is also helpful, whether it is niche-based, location-based, etc.
  • No Fraudulent Content: Meeting quality parameters and only having safe content on the site, which does not harm partner identity, is always a must.
  • Traffic Referrals: Having a decent percentage of traffic from search engines and direct referrals is a must. Many SSPs tend to reject publishers with more than 80% social traffic.

Airtory offers an easy-to-use and well-equipped Creative Management Platform for publishers as well as advertisers. Publishers can save significantly on operations overheads while delivering value to advertisers and interactive experiences to end-users. Advertisers, on the other hand, can create meaningful and cost-effective ad experiences at a fraction of their cost. Airtory offers an ad builder tool and innovative ad serving solutions.

Share on:

Schedule a demo